In his 2006 mid-year speech, Honda president and CEO Takeo Fukui outlined the three areas of global focus for the company over the next few years: (1) Establishing advanced manufacturing systems and capabilities in Japan and overseas; (2) Strengthening the foundation for overseas growth; and (3) Strengthening the commitment to reduce Honda’s environmental footprint.
For the US and Canada, this “2010 Vision” will result in the construction of new manufacturing plants, as well as the introduction of a new, low-cost hybrid and clean diesel vehicles, among other major initiatives.
The new hybrid. Honda confirmed that it is now developing a new dedicated hybrid vehicle “suitable for family use” in major automobile markets in the world. With this new dedicated hybrid vehicle, Honda believes it will offer a major cost reduction, enabling the company to offer the vehicle in 2009 at a price level lower than the Civic Hybrid.
The all-new dedicated hybrid vehicle, including the hybrid unit, will be produced at Suzuka Factory in Japan. The worldwide sales plan is approximately 200,000 units per year that includes projected North American sales volume 100,000 units.
Clean diesel. Honda is now developing a cleaner next-generation 4-cylinder diesel engine based on the successful diesel engine currently sold in Europe. This engine will meet the Tier2 Bin 5 emission standard.
Honda plans to introduce this super-clean diesel engine to market within the next three years. Honda will also work on developing a clean V6 diesel engine.
CO2 and fuel economy. While improving the fuel efficiency of gasoline engines with Advanced VTEC, Advanced VCM, and other technologies, Honda will expand application of hybrid technology to smaller size vehicles and diesel technology to medium-to-large size vehicles. Thorough leveraging the characteristics of each technology, Honda will accelerate its effort to reduce CO2 emissions.
In the US, Honda will seek to achieve top-level fuel economy for existing models with the aim of improving Honda’s Corporate Average Fuel Economy (CAFE) by 5% in 2010, from its 29.2 mpg 2005 model year CAFE rating for passenger cars and light trucks.
This effort includes the previously announced commitment to introduce within the next two years a more advanced version of Honda’s four-cylinder i-VTEC technology with up to a 13% improvement in fuel efficiency over 2005 levels, and a more advanced Variable Cylinder Management (VCM) technology for six-cylinder engines with up to an 11% improvement in fuel efficiency.
In 2000, the global average of CO2 exhaust emissions among Honda automobiles was 179.5g/km. Despite increased sales of larger-size vehicles such as SUV and minivans, average CO2 emissions dropped by 5% during the five year period up to 2005.
Honda is now targeting a further reduction of 5% or more, aiming to accomplish a total 10% reduction by 2010 compared to the level of 2000. Honda will also work toward a 10% reduction both for motorcycles and power products.
Honda’s global average of CO2 emissions to produce one automobile also declined by approximately 5% during the five year period up to 2005. The company is working toward a further reduction by 5% or more by 2010 to achieve a total reduction of 10% compared to the level of 2000.
Honda has thus become the first automaker in the world to announce global CO2 reduction goals for its products and production activities.
Other product initiatives. For its motorcycles, Honda plans to install fuel injection on the majority of new motorcycles worldwide by the end of 2010 and to introduce new engine technologies including super-low friction engines (fuel economy improvement of 13%) and VCM systems for motorcycles (fuel economy improvement of 30%).
Honda reiterated its commitment to fuel cell technology. It is developing a new model based on the current FCX Concept, and will unveil a driveable model in the fall. Honda plans to begin sales of this new fuel cell vehicle within the next three years.
Honda will also begin the production and sales of solar panels in fall of this year, within limited areas. Honda will begin mass production of the solar panel by establishing a production line with the annual capacity of 27.5 MW at Honda’s Kumamoto Factory in 2007.
Based on its manufacturing and product expansion plans worldwide and other initiatives, Honda envisions 2010 global unit sales of more than 4.5 million units for automobiles, 18 million units or more for motorcycles, and 7 million plus units for power products.